Kinkaid Co. is incorporated at the beginning of this year and engages in a numbe

Question

Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations.

Required:
2. How many shares of common stock are outstanding at year-end?
3. What is the amount of minimum legal capital (based on par value) at year-end?
4. What is the total paid-in capital at year-end?
5. What is the book value per share of the common stock at year-end if total paid-in capital plus retained earnings equals $790,000?

General Journal Debit Credit a. Cash 270,000 Common Stock, $25 Par Value 235,000 Paid-In Capital in Excess of Par Value, Common Stock 35,000 b. Organization Expenses 180,000 Common Stock, $25 Par Value 128,000 Paid-In Capital in Excess of Par Value, Common Stock 52,000 c. Cash 44,000 Accounts Receivable 19,000 Building 82,000 Notes Payable 59,700 Common Stock, $25 Par Value 55,300 Paid-In Capital in Excess of Par Value, Common Stock 30,000 d. Cash 142,000 Common Stock, $25 Par Value 79,000 Paid-In Capital in Excess of Par Value, Common Stock 63,000

Explanation / Answer

2 Shares of common stock outstanding=(235000+128000+55300+79000)/25= 19892 3 Amount of minimum legal capital =19892*25= $497300 4 Total paid-in capital at year-end=497300+(35000+52000+30000+63000)= $677300 5 Book value per share=(677300+790000)/19892= $73.76

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